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Vonage Pays Sprint $80M to Settle Patent Dispute

10/08/2007 9:35 AM Eastern

Vonage Holdings has put one of its patent headaches behind it, announcing Monday a patent-licensing deal with Sprint Nextel worth $80 million and that the two companies have settled Sprint’s pending lawsuit.

On Sept. 25, a U.S. District Court jury in Kansas City, Kan., found that Vonage had infringed six Sprint patents covering voice-over-Internet-Protocol technology. Vonage previously had said it planned to appeal the decision.

According to Vonage, the $80 million patent-licensing agreement includes $35 million for past use of license, $40 million for a fully paid future license and $5 million in prepayment for services. Under the terms of the deal, Vonage will have access to Sprint’s VoIP patent portfolio of more than 100 patents covering different methods, components and systems that connect telephone calls between a regular telephone network and a packet-switched network such as the Internet.

“We view this settlement and licensing agreement as a validation of the strength and breadth of our patent portfolio,” Sprint vice president of intellectual property Harley Ball said, in a prepared statement.

Vonage general counsel Sharon O'Leary said, in a statement, “We are pleased to resolve our dispute with Sprint and enter into a productive future relationship. We believe this deal is good news for Vonage, our customers and our shareholders. It allows us to put this litigation behind us and continue to focus on our core business by removing the uncertainty of legal reviews and long term court action.”

In a separate patent suit filed by Verizon Communications against Vonage, a federal appeals court last month denied Vonage’s appeal of a lower-court judge’s ruling that it infringed two of Verizon’s VoIP-related patents. The U.S. Court of Appeals for the Federal Circuit reversed the judge’s ruling on a third patent and sent the case back to the lower court to decide damages.

 

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